The commercial property market remains buoyant with the three multinational commercial property agencies that publicly release their financial results reporting combined revenues of $187.2 million in the 12 months to December last year.

The biggest of these was Colliers International which reported total revenue of $113.9 million (excluding GST) from its New Zealand operations last year.

That includes commissions from the sale and leasing of properties, and fees charged for services such as valuations and property management.

Of that, $71.9m was earned by Colliers’ directly-owned subsidiary in this country, which operates its Auckland business, and another $42 million came form its locally-owned franchised operations around the rest of the country.

CBRE had revenue of $46.1 million last year, up 6% compared to 2015, and JLL (formerly Jones Lang La Salle) had revenue of $27.2 million, almost unchanged from 2015 (see table below).

Colliers managing director Mark Synnott said the main challenge facing the company last year was how to hang on to the extraordinary level of growth it had achieved in 2015 when revenue grew 27% compared to the previous year.

“We were scratching our heads to see how we could go to $108 million again, but we did and we maintained profitability,” he said.

Synnott said growth levelled off in the Auckland market last year and much of the company’s increased business had come from its franchised offices around the country, with its Hamilton office having a particularly good year.

The stand out performer for Colliers last year was its Capital Markets unit that handles very large transactions, which generated twice as much revenue last year as it would in a normal year, Synnott said.

Deals the unit handled included the largest ever sale of a retail property transacted through a real estate agency in this country, Westfield’s sale of its Chartwell and Queensgate malls for $450 million to Stride, and the largest ever sale of an office building transacted by an agent in this country, Goodman’s sale of the Millennium Centre to property syndicator Oyster Group for $210 million, he said.

“One of those in a year would have been unusual, but to get two was extraordinary,” he said.

High level of interest from overseas investors

This year is also shaping up as not too shabby, thanks to the high level of interest from overseas investors in New Zealand commercial properties.

“We’ve had more interest in the first five months of this year than we did in all of last year, and when I say interest, it’s real transactions.”

One such sale was The Warehouse retail premises at Newmarket in Auckland, sold for more than $100 million to a mainland Chinese investor who intended to eventually develop a mixed use residential/retail/office complex on the site.

Most of the buying interest was coming from the Asia-Pacific region, including Australia, because the yields in this country were relatively more attractive than those in larger markets.

“They are getting at least double the yield for a prime property [in New Zealand] than they would get in Hong Kong or Singapore and they can still borrow at reasonable rates offshore, so it all sort of works for them,” Synnott said.

“A good proportion of the growth came from our business lines that service corporate occupiers and with the robust economy continuing, the same themes are evident in 2017,” he said.

You can receive all of our property articles automatically by subscribing to our free email Property Newsletter. This will deliver all of our property-related articles, including auction results and interest rate updates, directly to your in-box 3-5 times a week. We don’t share your details with third parties and you can unsubscribe at any time. To subscribe just click on this link, scroll down to “Property email newsletter”and enter your email address.